India will overtake China as the largest growth market for energy by late 2020s with the country’s energy consumption growing by more than 4.2 percent per annum, the fastest among all major economies of the world, according to BP Energy Outlook 2018.

“India's demand growth of 165 percent, nearly three times the overall non-Organisation for Economic Co-operation and Development (OECD) growth of 61 percent, also outpaces each of the BRIC countries: China (+ 41 percent), Brazil (+ 60 percent), and Russia (+6 percent),” the highly-cited report estimates.

India’s overall energy consumption will rise to 1,921 Million Tonne of oil equivalent (Mtoe) in 2040 from 724 Mtoe in 2016 with an average per annum growth rate of 4.2 per cent, according to the report. The increase in India’s energy consumption will push the country’s share of global energy demand to 11 per cent by 2040 from 5 per cent in 2016, accounting for the second-largest share of the BRIC countries.

Demand for renewables will see the highest growth of 1,409 per cent to 256 Mtoe in 2040 from 17 Mtoe in 2016, with an annual growth of 12 percent. The renewable energy share in India’s energy mix is also slated to increase to 13 percent in 2040 from 2 percent in 2016.

Nuclear energy demand will witness the second-highest growth among all energy sources, growing by 412 percent to 44 Mtoe in 2040 from 9 Mtoe in 2016. However, with an annual growth of 7 percent, nuclear energy’s share in the country’s total energy mix will only grow to 2 percent in 2040 from 1 percent in 2016.

Demand for natural gas will grow by 185 percent to 14 Billion cubic feet (Bcf) per day in 2040 from 5 Bcf per day in 2016. With an annual growth of 4.5 percent, natural gas’ energy share in the country’s total energy mix will grow to 7 percent in 2040 from 6 percent in 2016. Also, demand for coal will grow by 132 percent to 955 Mtoe in 2040 from 412 Mote in 2016. With an annual growth of 3.6 percent, coal’s energy share in the country’s total energy mix will decline to 50 percent in 2040 from 57 percent in 2016.

The report also said that the demand for oil, including petroleum products, will grow by 129 percent to 10 Million barrels per day (Mbpd) from 4 Mbpd in 2016. With an annual growth rate of 3.5 percent, oil’s share in the country’s total energy mix will decline to 25 percent in 2040 from 29 percent in 2016.

The report predicts that India’s energy mix is estimated to evolve slowly with fossil fuels meeting 82 percent of demand in 2040 down from 93 percent in 2016.

It added that power consumption will more than treble, growing by over 241 percent, with coal remaining the dominant fuel source. The fuel’s share of generation is seen dropping to 64 percent in 2040 from 77 percent in 2016 while renewables’ share rises to 23 percent from 5 percent in 2016.

According to the production data provided by BP as part of the Energy Outlook 2018 report, India’s oil output is pegged to decrease by 40 percent to 24 Mtoe in 2040 from 40 Mtoe in 2016. Natural gas production is estimated to increase 96 percent to 49 Mtoe in 2040 from 25 Mtoe in 2016. Coal production is estimated to increase by 154 percent to 734 Mtoe in 2040 from 289 Mtoe in 2016, with coal remaining the dominant fuel produced in India with a 63 percent share of total production in 2040. The report also indicates that renewable energy production will overtake gas and subsequently oil by 2020 as the second largest source of energy production.